Comments on: Microsoft(MSFT) Internal Mail on EC Decision

By: Alec

Alec — Mon, 17 Jul 2006 02:27:55 +0000

As always, the issue w.r.t. to opening up applications at Microsoft will boil down to two questions:

1) Does targeting an application at a different OS appreciably increase the market for the application?
2) Does building an application to target multiple OS’s impair the experience of that application on the dominant OS?

Example: Microsoft ships the office suite (except for Outlook) on the Mac. They enjoy 90+% share in the Mac market. This is a profitable place for them to expend effort. One cannot make the same case, for instance, for desktop Linux.

Example 2: Outlook was built as a PC application, and turned out to be very difficult to port to the Mac without compromise. Solution: Entourage was built in it’s place.

You should expect them to make rational decisions. That’s what the shareholders of the corporation pay them to do.

By: Paul Jardine

Paul Jardine — Mon, 17 Jul 2006 01:42:44 +0000

Alec, on digesting my own comment, and thinking about what would have happened if one telco owned the internet, I came to the same conclusion as you, Microsoft created it’s own asset, and therefore it is not exactly the same situation. However, we are at the stage where it is essential to all types of industry to have an OS for their PCs, and Microsoft’s dominant position in the OS market makes them an easy target for anti-trust legislation.
Actually, I am not in favour of imposing the kind of anti-trust legislation on Microsoft that has been done by the EU, just as I am not in favour of any Net Neutrality legislation; in principle.
The problem is that Microsoft is so dominant that I am not sure that market forces alone will force the separation of access and content. Perhaps, now that Bill is going, the new people will either open up Microsoft and make their applications more OS agnostic (in the case of AN Other) or close it up and belligerently try to build the wall higher around the garden (in the case of Ballmer), thus creating increased demand for alternatives.
On the timing issue, MS had since 2004 to comply with the ruling and only in April, after the deadline had passed, did they start making any efforts (i.e. once it was apparent they were going to be fined). The new deadline of July 31st is when it will be decided if the penalties need to be ratcheted up in order to get Microsoft to comply. As I say, I’m not sure I agree with what is being asked, but the fact that MS are in breach and should be fined is not really debateable.

By: Alec

Alec — Fri, 14 Jul 2006 10:26:34 +0000

Paul, I think the issue is simply a timing issue. One cannot argue with a straight face that politics don’t intrude into anti-trust. Anti-trust law, since the very beginning, has been political in nature, as governments have attempted to limit the power of corporations in the name of fairness.

I am not apologizing for, condoning, or condemning Microsoft’s behaviour. The company has, in the past, exhibited behaviour of the type that you describe, although one could argue rationally that Microsoft’s platform asset (windows etc) is NOT the same as the internet. The internet is a public utility, whereas Microsoft’s OS assets are a privately owned asset.

I would observe, however, that the company does appear to be making substantial efforts, and delivering concrete results designed to comply with the EC ruling. The decision to fine the company (as opposed to the initial decision to regulate it), appears to be more politically motivated than anything else.

By: Paul Jardine

Paul Jardine — Fri, 14 Jul 2006 04:16:42 +0000

The EU ruling focussed on a couple of areas, but those were really just examples. The bigger issue here is about separation of access and content (where have you heard that before?).
To put this into telco terms, Microsoft owns the network (Windows OS) and delivers its own content (Office, IE, WMP, Outlook etc) on that network. Does it unfairly make sure that it’s content has priority over other vendors content? I think it’s pretty clear that it does.

If the telcos implemented IMS and then did not make all the functionality of their IMS infrastructure available to 3rd party providers, we (in the internet industry) would be very upset about it and demand something like Network Neutrality or the separation of access from content. This is the SAME argument, only somehow, people seem to come down on the other side of the fence where Microsoft is concerned.

If AT&T bundled their own VoIP software and Relevance Engine into the ADSL modem/router they deliver to the end customer, which used some undocumented hooks to ensure priority packet routing, would that be anti-competitive?

I’m also mildly curious as to what Jim thinks the EU is trying to get revenge for?

By: Overspilning / Microsoft(MSFT) Internal Mail on EC Decision

Overspilning / Microsoft(MSFT) Internal Mail on EC Decision — Thu, 13 Jul 2006 10:57:29 +0000

[...] Original post by Alec and software by Elliott Back [...]

By: AccMan Pro / EU slaps Microsoft with €280 million fine

AccMan Pro / EU slaps Microsoft with €280 million fine — Thu, 13 Jul 2006 03:51:12 +0000

[...] GigaOM has the skinny on the EU confirming its original €280.5 million non-compliance fine. More interesting is the internal email from Microsoft legal eagle Brad Smith which was leaked to Alec Saunders wherein he says: In our view, the issue here is not about a lack of compliance, it’s about a lack of clarity about what the Commission’s expectations were for “complete and accurate technical specifications.”…To meet the demands of the schedule, a team of more than 300 employees was assembled, including some of the company’s most senior engineers…we will appeal this fine. We have great respect for the Commission, but we do not believe any fine – let alone a fine of this magnitude – is warranted given the lack of clarity in the Commission’s original decision and our diligent, good-faith efforts to comply over the past two years. [...]

By: Alec

Alec — Wed, 12 Jul 2006 22:47:42 +0000

My take also, Jim.

By: Jim Courtney

Jim Courtney — Wed, 12 Jul 2006 22:17:01 +0000

This only demonstrates the futility of government intervention in markets. First, they don’t understand the market and business case for the underlying technology; then they don’t understand what they want.

1. They ask for a product that has no consumer demand. Can anyone demonstrate increases in, say, Real Networks’ revenue as a result of the EU decision?

2. They cannot define a basic business goal: what is the final deliverable?

And, as you posted a while ago, they cannot sort out features from products. A classic example of “all the logical buyers had already bought”.

Sounds like “let’s get revenge at any price” to me.

By: GigaOM : » EU Slaps Microsoft

GigaOM : » EU Slaps Microsoft — Wed, 12 Jul 2006 20:18:13 +0000

[...] Update: An internal email from Microsoft’s legal captain Brad Smith gives a behind-the-scenes look at Microsoft’s EU compliance efforts. Brad’s emphasis is on the lack of clarity–he uses the term several times. He also says more than 300 employees were assembled to meet the compliance. That’s substantial manpower, which makes it even more surprising that the company fell short of compliance. [...]